MGM Q2 Las Vegas Revenue Doubles, Buys Back 8% of Stock

Posted on: August 3, 2022, 04:26h. 

Last updated on: August 3, 2022, 07:34h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

Shares of MGM Resorts International (NYSE:MGM) are trading higher in Wednesday’s extended session. That’s after the largest operator on the Las Vegas Strip said its Sin City revenue more than doubled to $2.1 billion in the second quarter.

MGM
Cosmopolitan Las Vegas., seen from above. The venue contributed to MGM’s impressive second-quarter results. (Image: Las Vegas Sun)

The Aria operator’s earnings before interest, taxes, depreciation, amortization, and restructuring or rent costs (EBITDAR) on the Strip surged to $825 million in the June quarter. That’s up from $397 million a year earlier, while hotel occupancy at MGM’s Las Vegas venues climbed to 92% from 77%. Revenue per available room (RevPAR) surged to $208 from $115.

Our second quarter results were outstanding, representing the best ever Adjusted Property EBITDAR quarter at the Company’s Las Vegas Strip Resorts and best second quarter Adjusted Property EBITDAR at our Regional Operations,” said CEO Bill Hornbuckle in a statement.

In the April through June period, MGM’s top line was boosted by the addition of Aria and Cosmopolitan to the company’s portfolio. That’s notable to investors, because the Cosmopolitan didn’t officially become an MGM venue until about halfway through the quarter. It indicates a full quarter of that property’s revenue could be meaningful for the operator.

MGM Continues Buyback Binge

While MGM maintains a paltry quarterly dividend of $0.0025 per share — a relic of a coronavirus payout cut — the casino giant remains a dedicated buyer of its own shares.

In the second quarter, the company repurchased approximately 32 million shares of its common equity at an average price of $34.42, equaling $1.1 billion. The stock closed at $34.20 today. Since early 2021, the Bellagio operator bought back 31% of its market capitalization via repurchases. With the April through June repurchases, MGM trimmed its shares outstanding tally by 8%, and more buybacks could be on the way.

“In connection with these repurchases, the February 2020 $3.0 billion stock repurchase program was completed. The remaining availability under the March 2022 repurchase program was $1.1 billion as of June 30, 2022. All shares repurchased under the Company’s programs have been retired,” according to the operator.

As of June 30, MGM has $5.78 billion in cash and cash equivalents, confirming it has the resources necessary to continue buying back its equity.

MGM Upcoming Plans

While the company didn’t mention specific potential transactions, including acquisitions, in the aforementioned statement, it made clear it is pursuing a New York gaming license. Empire City Casino in Yonkers is currently a slots-only venue.

The Las Vegas-based company added it continues to pursue integrated resort plans in Osaka, Japan.

MGM’s second-quarter results were also bolstered by strong performances at the company’s US regional casinos. EBITDAR at those venues jumped to $340 million from $318 million a year earlier, while sales at those properties swelled to $960 million in the current quarter. That’s compared to $856 million in the prior year quarter.